Published:  05:43 AM, 20 March 2020

Turkish shops close after Erdogan promises support for economy

Turkish shops close after Erdogan promises support for economy Turkish President Tayyip Erdogan talks during a news conference following a coronavirus disease (COVID-19) meeting in Ankara, Turkey, Thursday. -Reuters

Turkish clothing retailers said on Thursday they were shutting stores and shopping centers were set to close due to the spread of the coronavirus, after Ankara promised economic support and advised Turks to stay home for three weeks unless necessary.

Turkey announced a second death and said cases of the highly contagious respiratory illness had nearly doubled to 191, as it ramps up steps to rein in the virus, closing cafes, banning mass prayers and halting flights to 20 countries.
There are some 435 shopping malls in Turkey which have annual turnover of $160 billion and directly employ 530,000 people, according to the AYD shopping centers' association.

On Wednesday President Tayyip Erdogan called on people to minimize social contact until the virus threat recedes, but he did not tell them to stay away from work as he announced a 100 billion lira ($15.40 billion) economic support package.

Retailers including Mavi Giyim and Vakko Tekstil, listed on the Istanbul stock exchange, said they were closing their retail stores. Mavi shares dropped 4.7% and Vakko fell 3.5% after the announcements.

"Our first and foremost priority is the health and safety of our employees and our consumers globally," Mavi said as it announced the closure of stores in Turkey, Germany and Canada, adding that its online stores would remain open. After the latest steps, the lira was nearly 0.5% weaker against the dollar, hitting its weakest level since September 2018, and bringing its losses this year to some 9%.

The AYD said its board recommended malls shut in line with Erdogan's comments and was awaiting instructions from authorities. "None of our employees will lose their work and (the situation of) our tenants will be eased as necessary," it said.

Luxury goods chain Vakko said it was temporarily halting production activities as well as shutting stores. Other retailers who announced store closures included Boyner, Ipekyol and Marks & Spencer stores in Turkey, operated by Fiba Retail.

After meeting ministers and business leaders, Erdogan said on Wednesday Turkey would postpone debt payments and reduce the tax burden on some sectors in a package of measures to support the economy, but called on people to limit their movements. "None of our citizens must leave their homes or get into contact with anyone, unless absolutely necessary, until the threat disappears," Erdogan said.

Among specific measures, Erdogan said Turkey's tourism accommodation tax was being suspended until November to support the key tourism sector, which accounts for some 12% of the economy. Debt repayments of companies affected by the coronavirus will be postponed for a minimum of three months.

Turkey has already suspended mass prayer in mosques, temporarily closed cafes, sports and entertainment venues, as well as extended a flight ban to 20 countries, including major European destinations.

On Tuesday, Turkey's central bank cut its key interest rate by 100 basis points at an earlier-than-scheduled policy meeting, and acted to support volatile financial markets. The bank postponed its ordinary general assembly that was set for Friday.


---Reuters, Istanbul



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